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JOHN M. MORIN, Pennsylvania, Chairman W. FRANK JAMES, Michigan.

PERCY E. QUINN, Mississippi. HARRY C. RANSLEY, Pennsylvania.

HUBERT F. FISHER, Tennessee. HARRY M. WURZBACH, Texas.

WILLIAM C. WRIGHT, Georgia. B, CARROLL REECE, Tennessee.

DANIEL E. GARRETT, Texas. JOHN C. SPEAKS, Ohio.

JOHN J. McSWAIN, South Carolina. J. MAYHEW WAINWRIGHT, New York. JOHN J. BOYLAN, New York. JAMES P. GLYNN, Connecticut.

LISTER HILL, Alabama.
ALLEN J. FURLOW, Minnesota.

VIRGIL CHAPMAN, Kentucky.
WILLIAM R. JOHNSON, Illinois.
JAMES A. HUGHES, West Virginia.
HAROLD G. HOFFMAN, New Jersey.
FLORENCE P. KAHN, California.
VICTOR S. K. HOUSTON, Hawaii.

II

Androl

EDUCATIONAL ORDERS TO MANUFACTURERS BY WAR

DEPARTMENT

HOUSE OF REPRESENTATIVES,
COMMITTEE ON MILITARY AFFAIRS,

Friday, January 11, 1929. The committee this day met, Hon. John M. Morin (chairman) presiding:

The CHAIRMAN. The committee will be in order. We have for consideration this morning H. R. 450, a bill to amend section 5a of the national defense act, approved June 4, 1920, providing for placing educational orders for equipment, and so forth, and for other purposes.

We have before us the report of the Secretary of War, on this bill, and also the recommendation that was carried in the annual report of the Secretary of War for 1928. We also have several telegrams from business men in different parts of the country, all of which will be inserted in the record, including a copy of the bill as introduced.

(The matter above referred to is as follows:)

[H. R. 450, Seventieth Congress, first session]

A BILL To amend section 5a of the national defense act, approved June 4, 1920, pro

viding for placing educational orders for equipment, and so forth, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the second sentence of the second paragraph of section 5a of the national defense act, approved June 4, 1920, be, and the same is hereby, amended by striking out the period at the end of the sentence, inserting a colon and the following:

Provided, That the Secretary of War may authorize the placing of educational orders for equipment, munitions, and accessories needed in the military service with commercial concerns to the degree that is considered by him as being necessary to familiarize commercial factories with munitions manufacture and to advance the industrial war plans of the War Department, and in placing these educational orders the competitive bids which in his opinion best secure these results may be accepted; and he shall make statement of his action under this provision in his annual report.”.

(From the Annual Report of the Secretary of War for 1928 :)

SPECIFIC PROCUREMENT PLANS

Most of the work in war planning for procurement leads up to the production of a specific procurement plan for each important item. If these plans are to be of value when needed, each one must be kept up to date by frequent' revisions or renewals.

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To date 1,117 specific procurement plans have been made. These plans include accepted schedules of production of the item it is planned to procure and are based on the normal capacity of the facility for the item or material normally produced. Very few of these plans are for purely military items.

Articles which are purely military in their nature are not produced in nomal times and are generally not susceptible of replacement by substitute. Since facilities able without extensive alteration to produce these articles are practically nonexistent, plans must be made for the conversion of existing plants and designs must be worked up for the construction of new plants, including the necessary dies, jigs, and all machinery, even to the secondary requirements necessary for operation. These plans are called factory plans, and must be produced before specific procurement plans can be made covering many of the most important items to be procured. This particular class of planning comes alinost entirely under the Ordnance Department, Air Corps, and Chemical Warfare Service. It has been estimated by these branches that a total of 753 factory plans will have to be made by them. To date these branches have reported the completion of 45, 68, and 10 of these, respectively.

WAR DEPARTMENT,

Washington, September 24, 1927. The CHAIRMAN COMMITTEE ON MILITARY AFFAIRS,

House of Representatives, Washington, D. C. DEAR SIR: During the last session of Congress Senate bill No. 4917 was introduced in Congress but failed to be enacted into law. As I consider the provisions of that bill to be of great importance to the War Department, I request that it be introduced in the House and enacted into law at this session of Congress. The importance of the bill is set forth in the following paragraph : The second paragraph of section 5a of the national defense act now reads:

He shall cause to be manufactured or produced at the Government arsenals or Government-owned factories of the United States all such supplies or articles needed by the War Department as said arsenals or Government-owned factories are capable af manufacturing or producing upon an economical basis."

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The bill, which was introduced and which I desire should be reintroduced, reads as follows:

A BILL To amend section 5a of the national defense act, approved June 4, 1920

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the second sentence of the second paragraph of section 5a of the national defense act, approved June 4, 1920, be, and the same is hereby, amended by striking out the period at the end of the sentence, inserting a colon, and the following:

Provided, That the Secretary of War may authorize the placing of educational orders for equipment, munitions, and accessories needed in the military service with commercial concerns to the degree that is considered by him as being necessary to familiarize commercial factories with munitions manufacture and to advance the industrial war plans of the War Department, and in placing these educational orders the competitive bids which in his opinion best secure these results may be accepted ; and he shall make statement of his action under this provision in his annual report."

The change in legislation is desired to further industrial preparedness for war. In the consideration of industrial preparedness the following points are emphasized :

1. Modern war is a war of machines. 2. Modern war requires these machines in numbers heretofore undreamed of.

3. The capacity of Government arsenals for the manufacture of these machines is small compared with the volume required.

4. The industry of the country must make up the deficiency.

5. Modern industry is not familiar in time of peace with munitions manufacture.

6. Without this familiarity valuable time is lost when an emergency arises.

7. Much of this valuable time can be saved by placing educational orders for munitions with commercial concerns.

8. The placing of these educational orders will unquestionably add to national preparedness.

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9. The slight increased cost is cheap national insurance. 10. The placing of these educational orders is not possible under existing law. The applicable provisions of existing law on this subject are as follows:

SEC. 3709, R. S. “All purchases and contracts for supplies or service, in any of the departments of the Government, except for personal services, shall be made by advertising a sufficient time previously for proposals respecting the same, when the public exigencies do not require the immediate delivery of the article, or performance of the service.

In connection with this statute the Secretary of War has prescribed :

“Except in rare cases, when the United States elects to exercise the right to reject proposals, awards will be made to the lowest responsible bidder, provided that his bid is reasonable and that it is in the interest of the Government to accept it.” Section 5A of the national defense act prescribes : the Assistant Secretary of War

shall cause to be manufactured or produced at the Government arsenals or Government-owned factories of the United States all such supplies or articles needed by the War Department as said arsenals or Government-owned factories are capable of manufacturing or producing upon an economical basis.”

The proposed legislation should be enacted into law for the following reasons:

When the two above-quoted laws are considered in connection with our plans for industrial mobilization and procurement in time of war, including our desire to build up munitions production capacity in our private plants, it will be seen that, if strictly construed as they must be, they are very detrimental. Our industrial mobilization plans contemplate the placing of our war requirements not only with our arsenals but also with the various commercial plants. The arsenals will be given schedules which will utilize their maximum capacity in war, but these will be no means meet our requirements, and the majority of these requirements have been allocated to commercial plants which have accepted schedules of production.

It is the desire of the War Department to further in every way the war plans and preparations of these commercial plants so as to facilitate their rapid conversion from peace to war production. This, of course, involves giving the plants specifications, drawings, and manufacturing information, but these alone are not sufficient. In addition, each plant should receive as far as possible a small order for the manufacture of the articles which they will be called upon to manufacture in time of war. Only by obtaining experience in such a way can it develop and keep alive the art of manufacture, including the design for the necessary machine tools, gauges, dies, jigs, fixtures, etc.

However, the present legal requirements concerning competitive bidding make it impracticable to place such educational orders with the particular plants to which we have allocated our war schedules ; for, should it be necessary to conform to competitive bids on the manufacture of groups of material, low bids for such manufacture might frequently be received from concerns which would actually have no interest in the industrial program and would merely utilize such work to fill in during periods of depression. Again, other concerns which have the experience necessary would compete and it would be necessary to place manufacture with them without advantage to the United States.

The above-quoted section 5a of the national defense act also makes it impracticable to place such educational orders, because, in many cases, our existing arsenals are capable of manufacturing the article desired at a price which can not be met by the commercial plants. The arsenals probably are continually manufacturing the particular article and commercial plants are obliged to accept this educational order in a form which is to them more or less experimental, and hence their bids are higher than the production cost at the arsenal.

It is desired to submit briefly several examples of this; one of which is that of our new type of artillery guns and carriages. These have been developeu as a result of the lessons learned in the World War, and these are the types which we would like to manufacture in another emergency. Pilot models or these guns have already been made, and it is planned under the 10-year program to manufacture enough of them to equip a regiment or other tactical command with each type. These can be manufactured more economically at an arsenal than elsewhere, but we think it highly desirable to manufacture at least a portion of them in the plants which we have selected for their manufacture in war. This is not possible with existing laws.

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